- This Blog is for anyone who knows little or nothing about financial matters. -

Thursday, November 20, 2014

INTRODUCTION TO THIS BLOG

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Up to the summer
after I graduated from high school I was not very interested in attending
college. We did not have the money, nor did I have a good background. My final
grades in high school were 3 C’s and one B-.I was working every night and weekends, so there was little time to
study. My mother wanted me to attend West Point, because it was free and they
had a stipend of $700 per year. I passed the mental exams, but failed the
physical goals. During the summer of 1951, I received a letter from Heidelberg
University in Tiffin Oh. They had one Scholarship available for 2 semesters
which paid $150 a semester and also would give me a job on campus. Also I could
drive back to Mansfield every 2 weeks and work at the hospital. It is hard to
believe today that the tuition was $300 per year while today it is $20000 or
more. My grades at Heidelberg the first year and half were the same as high
school; all C’s. The 2nd semester my sophomore year I learned
something that I use every time I talk to a group or an individual. This saying
is:

WORK:
No matter what you are doing in life, it takes work to accomplish the job. Also
you need to be FOCUSED on the work and do not expect INSTANT GRADIFICATION.

It is good if you have
a strong degree of motivation and use help and suggestions from the people you
trust.

So
what did the above do for me? From the 2nd
quarter of my sophomore year until I graduated, all my grades were A’s except
one B. My Chemistry Professor at Heidelberg wrote to Purdue and they awarded me
a full fellowship. I had all expenses paid and even had some left over for
personal spending.

My first encounter with a financial investment was
when I graduated from high school. I received about $500 In cash, so I went to
a bank and took out a $500 Certificate of Deposit at 5% it gave me a big thrill
that I would make $25 without doing any work. As you will see if you stay with
my Blog, I am an ultra-conservative. Sixty years later, I still have that same
CD, but I now only receive $4.00 per year.

What is a Certificate of Deposit?

A Certificate of Deposit is, in reality, a savings
account with some strings attached to it. You are telling the bank how long you
will keep your money there. If you take
your money out before the date that you and the financial institution (bank or
credit union) agreed upon, you will need to pay a fine. On the positive side,
your money in your account is insured up to $250,000. Usually you can invest
your money for 3months to 10 year. The longer you invest the money, the greater
will be the interest you will receive. You will need to make that decision.

Note: Every time I use a new financial term I will
give a definition of the term, so in this manner you will learn the basic terms
of finance.The difference between a
bank and a Credit Union will be discussed at a later time.